Transportation and Quality of Life

This paper studies the importance of transportation for the quality of life in Denmark. The average Dane spends about 55 minutes on transport per day (DTU [2013]) and the average household's expenditure devoted to transport is about 20 % of the total household budget (Berri et al. [2014]).1 It is therefore important to recognize the importance of transportation for the quality of life. Transportation is derived demand as individuals often consume the service not because they benet from consumption directly, but because they partake in other consumption or activities elsewhere (see e.g. Small and Verhoef [2007]). Transportation allows households to buy consumption goods and activities, get to work and enjoy leisure. Households therefore face in general trade-o between, on one hand productivity and consumption advantages (high-paying jobs and high quality local urban amenities), and on the other hand higher costs of living and dis-amenities (high housing costs, congestions and pollution), when they decide where to live. Transportation infrastructure facilitates interaction within cities. It relieves pressure on urban land by enabling workers to live at some distance from their jobs at reasonable commutes. Transport infrastructure thus aect the attractiveness of urban areas. We construct a transport adjusted Quality of Life Index (QLI) for the 98 urban areas - municipalities - covering Denmark. Using this index we investigate the importance of adjusting for the inter area commute patterns in terms of the quality of life of a typical household. We also investigate the relationship between transport infrastructure investments and the QLI.